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This homework assignment is worth 25 points that will be awarded based on the following: Points QUESTIONS 1,2, 4 – 9, 11-14, 16 - 18 1 POINT EACH QUESTIONS 3, 10, 15, 19, 20 2 POINTS EACH TOTAL 15 10 25
1. Catskills Corporation had the following items listed in its trial balance at 12/31/12: Currency and coins $650 Balance in checking account 2,600 Customer checks waiting to be deposited 1,200 Treasury bills, purchased on 11/1/12 mature on 4/30/13 ...view middle of the document...
How much will Todd be able to withdraw at the beginning of each year if he elects to receive payments for 20 years? Round all calculations to the nearest dollar. a. $49,909. b. $88,057. c. $52,970. d. $100,816. e. $56,678. f. $94,221. g. $200,000. h. None of the above 4. Moss Inc. made a $15,000 sale on account with the following terms: 1/15, n/30. If the company uses the net method to record sales made on credit, how much should be recorded as revenue on the date of sale? a. $10,500. b. $13,500 c. $15,000 d. $15,150. e. $14,850. f. $14,700. g. $12,750. h. None of the above 5. Jeri Childs just won the lottery and is trying to decide between the annual cash flow payment option of $75,000 per year for 20 years beginning today and the lump sum option. Jeri can earn 7 percent annually if she invests this money. At what lump-sum payment amount would she be indifferent between the two alternatives? a. $1,401,869. b. $1,500,000. c. $1,605,000. d. $794,551. e. $387,629. f. $414,762. g. $850,170. h. None of the above.
6. Ross Inc. made a $12,000 sale on account with the following terms: 2/15, n/30. If the company uses the gross method to record sales made on credit, what is/are the debit(s) in the journal entry to record the sale? a. Debit Accounts Receivable for $12,240. b. Debit Accounts Receivable for $11,760 and Sales Discounts for $240. c. Debit Accounts Receivable for $12,000. d. Debit Accounts Receivable for $12,000 and Sales Discounts for $240. e. Debit Sales Revenue for $240. f. Debit Accounts Receivable for $12,000 and Sales Revenue for $240. g. Debit Accounts Receivable for $12,000 and Interest Revenue for $240. h. None of the above. 7. On January 1, 2013, Gary Company sold goods to Larry Corporation. Larry signed a noninterest-bearing note requiring payment of $17,500 annually for five years. The first payment was made on January 1, 2013. The prevailing rate of interest for this type of note at date of issuance was 9%. Gary should record sales revenue in January 2013 of: a. $87,500 b. $20,638 c. $75,462 d. $68,069 e. $61,798 f. $74,195 g. $62,599 h. None of the above Please use the following information to answer the next two questions. On 1/1/2013 Somar Company issued a 4-year note payable with a face value of $15,000 and an annual stated interest rate of 6%. Interest payments are made annually at the end of each year. The market interest rate on similar notes is 8%. Round all calculations to the nearest dollar. 8. What are the cash proceeds to Somar on 1/1/2013 from issuing this note? a. $11,025 b. $13,672 c. $18,600 d. $14,006 e. $15,000 f. $14,244 g. $15,187 h. None of the above.
9. What amount of interest expense will Somar record on 12/31/2013 for the note issued on 1/1/2013? Round to the nearest dollar. a. $900 b. $1,120 c. $1,200 d. $2,400 e. $1,094 f. $1,140 g. $1,488 h. None of the above. 10. Under the MLB deferred compensation plan, payments made at the end of each year accumulate up to retirement and then...